The Economic Case for Climate Action in the United States

Key Numbers

$240 Billion

Economic losses from weather events influenced by human-induced climate change and health damages due to air pollution caused by fossil fuel energy production are currently causing an average of $240 billion a year –or about 40% of the current economic growth of the United States economy.

$360 Billion

a year, on average, in economic losses, damages and health costs are estimated by the next decade –or about half of the expected growth of the economy.

80%

of the primary energy produced and used in the United States comes from coal, oil and natural gas –all fossil fuels. This percentage has not changed in the last two decades.

82%

of the United States greenhouse gas emissions are solely from carbon dioxide (CO2) from fossil fuel burning. CO2 emissions are primarily driving the observed changes in the climate.

1.9 Billion

workers in the energy industry extract and generate energy to power and fuel the residential, commercial, industrial and transportation sectors in the U.S.

15%

of the electricity used in the residential, commercial and industrial sectors is generated from renewable sources –solar, wind, bioenergy, hydropower and geothermal.

95%

of the fuel used for the transportation sector is fossil fuels –gasoline, diesel and jet fuel (92%) and natural gas (3%).

500,000

new jobs can be created by doubling the share of renewable energy, while reducing the share of electricity generation from fossil fuels by 23%.

250,000

new jobs can be created in the construction of carbon capture and storage plants which would allow the continuing burning of fossil fuels responsibly.

50,000

new jobs can be created in research, architecture and engineering to accelerate the identification, testing and deployment of innovative technologies to produce sustainable clean energy.

$200 Billion

in potential revenues can be generated from a tax on carbon emissions to be re-invested in reducing emissions, promoting a more efficient use of energy and encouraging the transition away from fossil fuels.

About this Report

Climate change is happening now. It is already impacting our daily lives. It is also impacting the United States economy.

Action to address climate change is compatible and essential for economic growth. It also creates jobs.

However, the United States Federal Government under the Trump Administration decided to increase economic growth without climate action. In addition, against the world’s commitment to fight climate change, the United States has begun the process of withdrawing from the Paris Agreement. These decisions were based on the claim that action to tackle climate change is against America’s domestic interests. As a result, energy production in the United States will continue to be primarily generated by burning fossil fuels –the major driver of the observed changes in climate.

The impacts of climate change affect many sectors, including agriculture, water, human health and ecosystems, among others. Although some of these impacts are positive, most are negative and affect lives and livelihoods. Using different indicators and assumptions, numerous studies have assessed the impacts of climate change in the United States. The majority of these assessments use the end of this century as a timeframe for the analysis.

This report specifically focuses on economic losses caused by extreme and frequent weather events influenced by human-induced climate change and on health costs due to air pollution exposure caused by fossil fuel energy production. It is thus a partial assessment of the economic losses and costs of human-induced climate change and fossil fuel use on the United States economy.

Climate is the average weather –temperature, precipitation and wind– over a period of time. Changes in climate are usually measured over a 30 year period, as defined by the World Meteorological Organization. Thus, this report analyzes extreme weather events over three decades: 1980s (1980-1989), 1990s (1990-1999) and the last decade (2007-2016). Based on these past trends, a projection for the next decade is estimated. It also presents the opportunities to boost economic growth and job creation while taking climate action.

Sources used for the analysis presented in this report include the National Oceanic and Atmospheric Administration, the American Meteorological Society, the National Academy of Sciences of the United States of America, the Centers for Disease Control and Prevention, the American Lung Association, the U.S. Department of Commerce, the U.S. Department of Agriculture, the U.S. Energy Information Administration, the U.S. Department of Energy, the U.S. Department of Transportation, the U.S. Census Bureau and the Second Biennial Report of the United States of America under the United Nations Framework Convention on Climate Change. Peer-reviewed research studies published in prestigious journals were used as sources for health costs.

Economic losses, health costs and economic growth figures are presented in 2017 dollars. To harmonize and compare, all figures were adjusted using the latest Consumer Price Index.